Faber: Western Standard of Living Won't Recover in 'Economic Armageddon'

Economist Marc Faber, publisher of The Gloom, Boom and Doom report, says the Western standard of living won't recover, let alone rise.

“Government debt is rising everywhere,” Faber tells Yahoo Finance. “We have stimulus packages, we have central banks that will print money (because) there is no other option to keep the system going,” he said.

“The stimulus today is a fiscal deficit of around $2 trillion. It will go up, in my opinion.”

Faber says Federal Reserve Chairman Ben Bernanke “will print money and keep interest rates at zero,” and when one day interest rates do go up Bernanke will keep them below the rate of inflation as did former Fed Chair Alan Greenspan in 1971 when interest rates were below cost-of-living increases.

Faber is convinced there will “an economic Armageddon.”

“That is a high confidence prediction,” he says. “The total collapse will come.”

One day, says Faber, people will notice that their standards of living won’t rise, and then, to divert attention, governments will go to war.

“We have already two wars,” says Faber. “And Afghanistan is a barrel without a bottom.”

When capitalism collapses, there will be currency reform, Faber says, in which existing dollars are called in and government will issue a new currency.

“The dollar has already lost 95 percent of its value since the inception of the Federal Reserve,” he says.

Bloomberg reports that Federal Reserve Bank of San Francisco President John C. Williams said the housing “bust” is weighing on the U.S. economy and that monetary stimulus is warranted to boost growth.